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Obama Unveils Deficit-Fighting Plan

   VOA News  April 13, 2011
   President Barack Obama outlines his plan for cutting federal spending
   during an address at George Washington University in Washington, April
   13, 2011

Photo: AP

   President Barack Obama outlines his plan for cutting federal spending
   during an address at George Washington University in Washington, April
   13, 2011

   U.S. President Barack Obama has presented a plan that he says aims to
   reduce the nation's massive deficit by $4 trillion over the next 12
   years.
   President Obama outlined his economic strategy in a speech at George
   Washington University in Washington Wednesday.
   He said the approach he is proposing "puts every kind of spending on
   the table," but still protects the middle-class, the elderly and
   investments in the future.
   The president's plan includes cutting domestic spending, finding
   additional savings in the defense budget and reforming costly programs
   for the elderly, retirees and the poor.
   President Obama said he also wants to reduce spending in the tax code.
   He said he refuses to renew tax breaks for the wealthiest Americans.
   The president already agreed to extend the tax cuts once, in December,
   and says it was the only way he could prevent a tax hike on the middle
   class.
   The White House says the $14 trillion national debt is threatening the
   U.S. economic recovery and prospects for growth.
   After meeting with President Obama ahead of the speech, leading
   Republican lawmakers reiterated their opposition to raising taxes.
   Republican House Speaker John Boehner said that if Republicans and
   Democrats are going to resolve their differences and "do something
   meaningful," raising taxes will not be part of that. Boehner has
   previously said that any proposal to raise taxes would be
   "unacceptable" and a "non-starter" for budget negotiations.
   Republicans have their own ideas for slashing the deficit and have put
   forward a plan to make deeper cuts to federal spending. The White House
   says the Republican plan unfairly targets the middle class.
   Republicans, who control the House of Representatives, say Mr. Obama
   must agree to significant long-term spending cuts before they will give
   their approval to allow the government to borrow more money, which is
   necessary as the government is predicted to reach its debt ceiling
   within weeks.
   Senate Republican Leader Mitch McConnell said his view of "significant"
   cuts is a path to reduce spending, both short term and long term, that
   is viewed as credible by the markets, the American people and foreign
   countries.
   He said people all over the world are beginning to wonder whether the
   United States is in decline, and said the government's effort in the
   coming weeks is "extremely important" in terms of restoring confidence
   that the U.S. is going to get its "act together financially."
   Speaker Boehner has said the House of Representatives will not approve
   an increase in the debt ceiling, unless spending cuts are included.
   The U.S. government is expected to reach the congressionally mandated
   debt ceiling in coming weeks and can only borrow beyond that point with
   congressional approval.
   Failure to raise the debt limit could force the United States to
   default on interest payments on loans. Much of the debt is held by
   foreign governments, such as China. White House Spokesman Jay Carney
   warned Monday that defaulting on loans would have an "Armageddon-like"
   impact on the slowly recovering U.S. economy.
   Republican and Democratic lawmakers agreed late Friday to cut $38.5
   billion in spending from the current fiscal year's budget, a deal that
   narrowly averted a government shutdown that would have begun the
   following day. The spending cuts would only slightly reduce a budget
   deficit that is expected to hit $1.5 trillion this year.
   The House is likely to vote Thursday on the 2011 budget bill, with the
   Senate soon following suit. For the 2012 budget bill, the House is
   likely to begin debate on that Republican-sponsored measure Thursday,
   and hold the actual vote on Friday.

   Some information for this report was provided by AP, AFP and Reuters.

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